June 1, 2016 / 8:07 PM / in a year

UPDATE 2-Canadian auto sales edge 1.5 pct lower in May

(Adds GM Canada sales, analyst's note)

By Allison Lampert

MONTREAL, June 1 (Reuters) - Canadian auto sales for May edged 1.5 percent lower on an annual basis, the first monthly decline since December 2015, but the industry could still be on track to hit a new record this year, analysts wrote on Wednesday.

Total Canadian auto sales slipped to 194,866 vehicles last month, with General Motors Co reporting a 16.4 percent year over year decline, partly because May 2016 had two fewer selling days than the same month a year earlier, wrote analyst Dennis DesRosiers in a note to clients.

Fiat Chrysler Automobiles said on Wednesday it sold a monthly record of 31,724 vehicles in May, up 0.3 per cent compared with the same month in 2015. Ford Motor Co on Wednesday reported slight gains in May auto sales in Canada, while Honda Motor Co Ltd said sales rose 5 percent.

Despite the decline in May auto sales, year-to-date figures rose 5.6 percent to 798,089 vehicles sold during the first five months of 2016, compared with the same period a year earlier, DesRosiers wrote.

In April, total Canadian industry sales exceeded 200,000 light vehicles, the most in a month.

In a May report, TD Economics said the industry was on track for another sales record in 2016.

"A new record at the end of 2016 is still possible," DesRosiers wrote.

"We believe Canada is still on pace for a record year, which we expect to finish at 1.94 million light vehicles sold," wrote Bill Rinna senior manager, North American Forecasts at LMC Automotive, in an email.

In the United States, auto industry sales fell 6 percent in May, with General Motors, Ford and other manufacturers reporting lower U.S. vehicle sales for the month due to sluggish demand for sedans and the two fewer selling days.

Major automakers reporting May sales on Wednesday sold new vehicles at an annualized rate of 17.45 million vehicles, Autodata Corp said, up from 17.42 million vehicles in April. The May annualized rate was generally in line with analysts' expectations.

The U.S. auto industry also was headed for another record year, even as May new-vehicle sales reported through Wednesday declined due to weak demand for sedans, analysts said. General Motors Co, the largest U.S. automaker, reported an 18 percent drop to 240,450 vehicles from a year earlier. (Reporting by Allison Lampert; Editing by Richard Chang and Sandra Maler)

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